A coalition of 25 states and the District of Columbia filed a federal lawsuit challenging CMS's interim final rule that tightens Medicaid work requirements and narrows the medical frailty exemption, arguing it will bar eligible people from needed care.

The rule requires expansion enrollees ages 19 to 64 to either work, perform at least 80 hours of community service each month, or be in school at least half the time, with exemptions for the medically frail and others.

Plaintiffs say the interim final rule exceeds the statute’s text, creates barriers to coverage by narrowing exemptions, and imposes stricter work requirements for expansion enrollees starting in January.

State officials warn the policy could reduce MassHealth coverage, potentially limiting access to care for low-income residents.

CMS and HHS did not comment immediately; supporters describe the rule as a measure to curb government freeloading and preserve benefits for those in need.

States warn the rule will raise administration costs and could push more medically vulnerable people into being uninsured, increasing strain on providers and emergency departments.

The coalition is seeking a temporary halt on the disputed provisions while the case proceeds, with a virtual press conference planned alongside attorneys general from California and Massachusetts.

Some New Jersey hospitals are preparing to help patients comply with work requirements or obtain exemptions, signaling industry concern about patient impact and administrative burden.

Massachusetts officials warn of potential financial penalties for non-compliance and argue the rule undermines access to care for vulnerable residents and families.

States allege CMS did not provide sufficient guidance or updated systems to implement changes and communicated inconsistently, undermining planning efforts.

States claim the rule oversteps statutory language and fails to provide clear guidance for state system updates, risking loss or denial of coverage for eligible individuals.

States say the communication about the rule was inconsistent and guidance for updating state systems was unclear, potentially causing coverage loss during implementation and renewal.